tv Bloomberg Markets Bloomberg June 9, 2015 3:00pm-4:01pm EDT
-- isis compressing expanding. whetherompany decides or not to add mainland security with global indexes. >> and dennis makes his first court appearance. he appears before a federal judge. felony charges. ♪ scarlet: good afternoon, everyone. i'm here with alix steel. claw you're seeing stocks their way higher, reversing earlier losses. one exception is apple wave on the index there. you're still looking at the down negative on the year, scarlet, as you see the sentiment shift here in the u.s. scarlet: it feels like we're
still in search of some sort of catalyst. meandering all day long. we have important data later this week. retail sales, wholesale inflation that will hopefully provide some direction. alix: one getting a lot of direction today is the dow jones transportation. airlines are just being crushed right now weighing on the transportation average. bloomberg's airline index is on a bear market. american airlines said revenue is falling more than work as a mechlin what we heard from delta and united. the reason i want to bring this dow.ransports, goes the you have a transportation sector indicative of economic growth and demand. and what that would mean for stocks. another thing that may be a warning sign if you're looking for the catalyst is a selloff in treasuries. prices down, yields up. the yield on the 10 year moving 2.41%.
year notea three sale, appetite for treasuries are waning in this ticket or sale. $58 billion of ons being sold this week at a time when investors are pricing in at higher interest rates. alix: 2.5% on a 10 year, he thinks is easily feasible. it is interesting to see the sentiment is turning there as well. scarlet: there is volatility in the bond market. alix: somewhere. part of the white house was evacuated after a bomb threat phoned in. secret service operators interrupted a live news briefing with the white house press secretary and evacuated the briefing room. it happened shortly after 2:00 p.m. after a recent -- security sweep, it was given the all clear. rare but not unprecedented. scarlet: president obama was at the white house at the time but he and the first family were not of acted by the evacuation. earlier on, the president defended -- at address in
washington. he says his health care law is no longer just a law, but a reality for millions of americans. president obama: while we were told again and again obamacare would be a job killer, amazingly enough, some critics still peddle this notion, it turns out, in reality, americans experienced 63 straight months of private-sector job growth, which started the month we passed the affordable care act. scarlet: the supreme court ruled on whether -- a key benefit -- aggression demands a stronger u.s. reaction on alliance. will meet with leaders in three countries before leaving for europe. shook up his campaign staff. he named a new campaign manager, gop operative. the washington post is reporting that bush, expected to formally launch his campaign on monday
has are refiled his initial paperwork to run. ago, dennis arrived at a chicago courthouse, accused of breaking banking laws. yes plaid not guilty. pay $3.5d he agreed to million to cover up misconduct. he is expected to set bail. alix: back into the early days of the obama administration, where his new head of medications is. to name robert gibbs his global division. he was the white house press secretary under president obama. he will report to the ceo, steve easterbrook, and is trying to pull mcdonald's out of a long slump. europe, the latest on greece. chancellor angela merkel and the greek prime minister plan to hold off on the sidelines of the european union -- unit summit. formcomes after tough talk
the journey -- german finance minster pair he says the ball is in greece's court and they must decide if they have to carry a difficult load. greece has a new proposal to unlock my ap or one international official told bloomberg it is just a rehash of older plans. alix: massive job cuts are on their way in the world passes largest bank. the ceo plans to eliminate 10% of the staff, as many as 25,000 planss, all part of his to reduce incentive by $5,000 per year and restore profits. all of the cuts will come from initiatives such as automation, digital banking, and reducing and ministry of costs. scarlet: general elective -- general electric. plane candidate pension investment board. a price of $12 billion, takeover financing, the first sale of the business would unload $200 billion of capital assets here that is a look at the top
stories at this hour. coming up in the bloomberg market day, senator marco rubio is running for u.s. president, which would put him at the helm of the world passes biggest economy. his own personal financial decisions are coming in. alix: voicemail might soon go the way of vcr and cassette tapes paired companies might eliminate this feature to cut costs. announcing it would produce a starring brad pitt paired investors will discuss a couple of stops splits. we will discuss the pros and cons. not brad pitt, because that is a pro, clearly. stock split's, may be pros and cons. much more is coming up on the bloomberg market day. alix: nearly two years after his departure, george zimmer is back and his new startup aims to bring the art of taylor and close into the digital age. the service allows customers to schedule taylor's who made out calls. i would love that. i could use something like that.
scarlet: zimmer spoke to betty liu and pimm fox about why there was willing to pay. zimmer: i was thought of myself as a mix between the godfather of tailoring. i used to have a couple thousand tailors that work for me and for whatever reason, they have always had an affinity for me. here, i driving over actually stopped at an old store of one of our stores, ran in, actually to use the bathroom, and in the tailor shop, no less, the taylor, upon seeing me, after not having seen me in a couple of years, first in two tears. somebody like me has their back.
>> is there a root young people can follow to hang the measuring tape around the neck? george zimmer: most tailors today are immigrants in new america. the american dream often starts with tailoring and then subsequent generations go to college. >> i mean this with all respect. are these your revenge? george zimmer: absolutely not. we are way too busy to even think about revenge. there is no reason why my former company could not even avail themselves of our service. m: explain how the service would work. what would be the process? you can on the web, and it is being built into an app in 30 days, it is very
simple. indicate visit code where you want the taylor to come, the day and the hour, and the software we have created matches tailors with clients based on that information. >> and they come to your home. pimm: does it come your -- george zimmer: you select the gender of your taylor as well as the picture, to house. mentioned men's wearhouse acquired that line of that company. they have also been very aggressive on recording the younger male, the younger male customer. you know, again, i am just saying, ousted you, perhaps in your mind, you are the old,
middle-aged, male customer in men's wearhouse. george zimmer: that is what they is thatt my experience i'm very popular amongst millenial's. they look at me as sort of -- scarlet: where is your evidence? george zimmer: just walking around in my george zimmerman ask every day and having people come up to me and give me feedback. pimm: tell us what makes a taylor great and what kind of skills you need. george zimmer: the fitting is the key, not the selling. -- sweing. -- sewing. when hee magic johnson entered nba, we tell our tailors it is not enough to just tailor the garments. we have got to make it entertaining and fun. where do you see it in
the next 12 months? how many people are working for you? george zimmer: we have a number of ideas and development. -- outside of new york, nobody knows, we have a lot of very interesting ideas. , and about online apparel everybody orders now online. fits.uff sort of we are now here in the center of everyable to spend in home in america. that man has a golden voice. coming up, senator marco rubio's money woes.
scarlet: welcome back. to julie's go straight hyman. some stocks are making headlines. julie: target is coming out and saying it is raising its stock i back by $5 billion. the authorization is going to $10 billion. the company has already invested under its authorization through the first quarter and it is also raising dividend to 50 cents per
share. after the headlines came out. it is one to watch as the headlines come out in the past few moments. target is expanding share in dollars.re i do want to look at some of the dow movers today. even though averages are higher, you still see pressure from airlines. still a lot of concerns about pricing, the state of economy, and ironically, the stock that sells off, american airlines. the company is the latest to cut the revenue forecast am a revenue per passenger mile flown. the stock, call it little changed, that measure was going to fall 68% in the second quarter down from an earlier forecast. that is where we are seeing even
wishy-washy in one sector. companies coming out with earnings and earnings commentary, lululemon coming out with earnings that beat estimates, raising its first-quarter full-year outlook profit forecast and sales climbed by 10% as companies turn around. quicksilver is plunging by nearly 30% after the company abandon its forecast entirely amiss struggling sales. forecasts as well sending its shares lower. scarlet: a couple of names from yesterday's mall and today's mall. alix: i like that. for a look at the top stories from the terminal, we have the former house speaker dennis treated -- pleading not guilty. arrived at the courthouse earlier this afternoon. accused of breaking banking laws in line to investigators.
he says he agreed to pay someone 3.5 billion dollars. he faces as long as five years in prison if convicted. scarlet: job openings rose in april more than forecast. the number of positions waiting 70,000.lled was up 260 the number of americans quitting their job was unchanged. boosteds. wholesalers in april, the largest amount since january. sales increased to one point 6%. an increase to inventories can be an indication of rising business optimism as companies restock and restore shelves on demand. scarlet: governor chris christie over the state union. have to fund a budget gap. it is up to the state legislature to evolve the
funding. posts a political challenge for a potential presidential candidate. that is a look at the top stories for this hour. marco rubio is coming under scrutiny for his personal finances. a response to his spending and shoddy book keeping. even his supporters are weary of his eye natural habits. the new york times wonders how this will manifest if he becomes president. joining me from washington, john hodge -- john, it is not exactly new. mitt romney considered him as a potential running mate that they looked into these issues and there were red flags all over the place. >> that is true. marco rubio was on the shortlist but he was not ever really on the short list or at the top of it. i do not think financial issues were the reason he was not on the ticket. have hadrepublicans
concerns about the spare they were waiting for a story of this kind to break for a while. and a sign rubio is taken seriously, starting to get some of the test scrutiny. will have a trickle-down effect? is holding acle fundraiser. does this prestigious -- deter such fundraisers going forward? >> i do not think one story in the new york times will scare off those inclined to give money to marco rubio. there is no doubt this is the beginning of a series of articles and stories that deal way rubio in a skeptical relating to his past. in florida, that could be problematic. one big story like this, this will leave bruises but it has not drawn blood. we will see what comes next. scarlet: let's stick with presidential candidates here. berlinh gave a speech in
. what was his endgame? we know bush is incredibly unpopular in germany. john: i do not think jeb bush will run for president of germany at any time. i do not think he cares that much about the german electorate. what he cares about is those at home. there is no place like america in the republican party we can be too tough on vladimir putin. that is what jeb bush is doing. he is being critical of the obama administration and by indication hillary clinton p are showing he can be a tough guy on the world age. alix: make sure you watch john and mark kaplan on all due respect tonight. >> still ahead, his voicemail dad? why companies are cutting services to trim costs. ♪
scarlet: these days, fewer people are using voicemail. alix: my husband said, why is there a blinking light on your answer machine? i never check it. companies are starting to get rid of the service to trim costs . who stands to lose and why. pager, thegraph, the typewriter. no one really uses them anymore. and this. >> hi, you have reached the voicemail. it's a voicemail is starting to slide into the history books. companies like these, for drople jpmorgan, it will service for 100 56,000 consumer banking choices and 56% of all staff. savings there, $3.2 million. coca-cola said the same thing.
they are dropping voicemail at atlanta headquarters to the tune of 2000. the savings there, about $100,000. citigroup and bank of america aboutportedly thinking dropping voicemail as well. while it is saving money for these companies, voicemail service providers like all of these stand to lose. formight have heard this leaving a message. >> your call is being answered it -- answered by audit. company that provides was male. cisco as well as other major providers should be watching the voicemail slide. while the voicemail use has declined, texting has rocketed here it is faster and people are simply more mobile and with more mobile phones. in 2000, mobile phone users send about 12 million text each month according to a study. tot is nothing compared
s were1 561 billion text sent each and every month. up from just about 60 a decade ago. look at your next phone bill and see how you can prepare for the rise and text -- rise and fall of text and voicemail. alix: this is all cost driven? >> you would think. we saw those numbers from jpmorgan and coca-cola. jpmorgan says each line only costs about $10 or so. million..3 companies are realizing employers are not using voicemail and if they're not using it, why have it in the first place question mark i had was my messages just for some to say, no voicemail on my account.
how about you guys? when was the last time you checked your voicemail? i do not check it on my landline. my landline is dead to me. my husband says, why is that flashing light blinking, can't you just check the voicemail? too time-consuming. we do not talk at all. we go right to text. ramy: a lot of people are saying because of the rise of mobile, a lot of people will go much more so into text. we're look at about 20 million more cell phones over the next three years. crazy.: fast.i type really i have unlimited. scarlet, i am saying goodbye to you. much more's coming up we will be back. ♪
the last fewget in minutes, the company is boosting dividend by 7.7% and will expand its share buyback by $5 billion. shares have spiked on the news and then dropped off. the general motors board is telling chrysler it will pass on merger talks. in ther made the offer e-mail. inssing for consolidation the auto industry. mary barra said the company decided its own plans for growth could generate more value than merger. are-time workers from aaa getting a boost in benefits next month. the restaurant chain says they will receive paid vacation, sick pay, and reimbursements for tuition. the benefits were previously offered only to workers. delivery startup is cooking up something big. the company announced it is raising $135 billion in new funding.
the founder and ceo of blue apron. >> we are really investing in our infrastructure fulfillment. and help them cook at home. announced apron also a warehouse in dallas that would allow them to distribute practically to the entire continental u.s. starting next march, you will be able to buy a mercedes that does some of the driving for you. i like this. a self jiving system for highway speeds. drivers will still have their hands on it -- on the steering well. that is a look at top stories on this hour. coming up on the bloomberg market day, it is decision day. will they or won't they, global indexes? we will examine a decision that will affect billions of dollars. tonight'sfuture,
annual meeting. set week, we learned it is to be buying 4000 properties, the industries largest purchase. we will talk to the ceo involved in the market. all that and much more is coming up on the bloomberg market day. more layoffs. eliminating more than 25,000 jobs following the footsteps of jpmorgan at ups. [coughing] excuse me. there is also speculation of cutting the bank further particularly of debt provisions. the japanese bank is actually expanding its credit business here in the u.s. hiring about 40 people from the royal bank of scotland. why? .et's ask the ceo lisa is also with us. why? why expand?
other guys are like, i do not know, i am out. john: we are fortunate i have been able to lead a team of good people from wall street who have the competence of parents in tokyo. it is a great situation not just specifically for mizuho, but japan and the economy and how it is working right now, playing to our growth story. just today, a colleague put this story out. offering from the threat rising interest rates according to the cfo, bruce thompson. you have got banks that are really concerned about rising interest rates, concerned about holding inventories, are you holding bigger inventories? is there bigger potential risk? there is oh is risk in the business. if you look at fundamentals and last month, it was the largest ever in the month of may. a lot is to be done there.
is nowd a company that one of the top 10 underwriters in the world. there are opportunities there if the risk properly and do it we have been doing. how much have you grown your headcount? john: the story starts seven years ago when week celebrated our program. it has been a steady growth during the financial crisis, a great opportunity for us to pick up very good quality people and build a great team. also because of credit and strong balance sheet, people want to do business with us. a great opportunity at that time , as other banks were uncertain in their future p are we came in and would have capitalized on that. we continue to grow the story and the firm. alix: i do not live and breathe the stuff the way we set us.
i see u.s. banks and european investmentng back banking parts due to regulation and lack of liquidity and excess risk. you are doing the opposite. either you are taking on more risk or they are doing something really dumb. how do you understand the tension? john: there are always risks. japan is going through a time in their economy, they had 20 years deflationary environment where they're starting to come out of it. putnew prime minister measures in place where the economy is growing. japan in general is looking for yield and opportunities. our firm based in japan looking for that as well. we feel it is a great investment in the americas to put our money there. because we have a great platform, we are continuing to add on that. we are accelerating our growth
story from this acquisition a year-and-a-half to two ears. it does not mean we are smarter than everybody, but it does mean we are understanding the risk, we think it is a great opportunity, especially with and takingty talent, future risks and trading like other firms in the past have done. >> how concerned are you about a potential significant route in the bond market? john: in terms of a backup? now, there was $1.5 billion in the past week. you have got global sovereign debt completely selling off. in the highest in september and october, more levels. people are really concerned about the backup. it could stymie corporate debt so they could create problems and defaults so people are
having trouble refinancing. john cohen there is no question some rates will go up. the fed will make a move, whether it is september or october or q2 of next year. it will happen. reason we have diversified our businesses to handle such moves an it just rates as they go up, being in different clients,o supply our there will always be cut -- capex issues. clients will always issue debt and whether they do it at the bee pace is left to determined pair but then there is equity and everything else. to keep your risk down as minimal as you can. mean you're not holding the inventory very long? how do you medicate -- mitigate that risk? the model is changing from 10 or 15 years ago
, and a lot of investment banks are trading. these positions to facilitate our clients per we get out of them as soon as we can and we go on to the next. alix: what is next. expanding and corporate debt, underwriting, has it moved into derivatives and will it move into credit derivatives and other bases? john: traditionally, we have been a japanese house, the best service in the united states for japanese equities. it is now a big push up. investor clients. a pleasure to meet you. lisa, as always, thank you for .eing here as well
alix: welcome back. now for a look at the markets. more than 50 minutes before the closing bell p or julie hyman is looking at broad index as well as asset classes. action hast of the been on the outside of stock spirit within stocks, we have traded in at a tight range. that is true recently. take a look at major averages. the s&p is a very slightly.
it dow has turned lower and is now lower on the year, down 6.5 points and the nasdaq down in the red as well. we see more have action today? take a look at the treasury market. yields bump up to their highest since late september and early october. also had an auction today. joining their highest yield since april of 2011. we will have a lot of supply coming to market this week and that is one of the many things putting pressure on these prices as we see yields climb. the dollar cannot find anything today either. .1 percent. oil prices, we are seeing some actions gaining today on supply. particularly the u.s. shale supply. i have a chart of oil prices over the last year.
this year, we have seen the rebound in oil prices. since the beginning of may, when we first saw oil come back $50 per barrel, it has had a hard time getting substantially above that level. 5995, it cannot really seem to hold above 60 for any substantial time. if you look at energy stocks, we see that within the stock market . one of the things keeping us from falling further. you see companies all gaining. i talked about the outlook for production. tomorrow. we have had the industry talking about show production to some extent. if you look at my terminal, i .ave shale production this measure production forecast to fall for this month.
the lowered pricing over the past year we have seen in oil does in seat -- seem to be putting pressure on the show producers. that eventually is forecast may be to see through to production to some extent. highest production despite decline in different areas. now i look to top stories making headlines at this hour. the 14th world series of poker championship, four more than poker's other legends. he says he plans to give the championship race lit to the family of his friend. the silicon valley entrepreneur dave goldberg. you remember that goldberg died last month on a treadmill accident while in new mexico on vacation. sheryl sandberg.
game three tonight. to victory intied overtime. the cavaliers have 120 six of their last 28 home games. in the stanley cup playoffs, tampa bay came behind last night to be chicago 3-2. -- lightning leaves the best the man trying to build a hockey and real estate empire. >> we think we have an exciting opportunity. downtown, surrounded by water on three sides, pretty much a .urface parking lot we think it will be a great location for corporations to move into, for retail and residents. tomorrow night in chicago.
that is a look at some of top stories in this hour. in just a few hours, whether to include china shares in the emerging market index. it could mean up to 300 billion dollars of fresh inflows. shares have rallied in the month leading up to the decision and joining me now,., let's make a decision -- a distinction here. what is being considered today? >> what is currently in there is hong kong shares. if you look at the market index, it is 20% of china. all of that is hong kong shares. they are considering adding onshore's -- shares only available to mainland citizens of until now. say start at 5% and an increase up to 13%. you are now looking at about 35%. on top of that, they already shares,y would include
chinese companies listed in the u.s. like alibaba, already happening in november. if they decide to include shares today and get the ball rolling, you're looking at 40 to 50% weighting in china in a few years. alix: that is a lot of of waiting. is that unusual and what is the monetary value, how much money goes and of china as a result? >> yes, it is unusual. nothing diversified has that big of a waiting toward one country really are china is also unusual, you could argue. if you look at the total amount of dollars this could mean in aters, i would ballpark it 300 billion. if you go and think $1.7 trillion is benchmarked to the emerging markets index, a lot of active management and ultimately trying to beat it.
borderline $2 trillion. if you look at a 15% weighting, i come up with $600 billion at some point. alix: those are serious numbers. i want to switch gears as i have you on the air right now. the bond market route we have seen has spread to junk bonds. what kind of damage in outflows have you seen in the junk bond etf's? we havee past week, seen 1.5 blowout. it is only 3% of the total. they can tell you sentiments, smart money, etc. buts definitely noteworthy it makes sense the price is starting to fall. something not really with that too often is this jump on it that took money. it tracks short-term, they sought inflows of about 100 million.
people might be more concerned about rates than credit risks. interest rates also took in which10 million, indicates people are more concerned about interest rates than credit. >> interesting and thank you for that distinction. good to have you. shareshead, netflix flying high. can it keep momentum going? ♪
ill simon, chief investment officer of hedge fund h x capital. also with us from princeton, new jersey, paul sweeney of bloomberg intelligence. good to have you. this is what everyone wants to know. do we see a stock split? unusual forretty netflix to have this share count. --think >> we are past the point here where i think a lot of retail investors, who, in theory, would be very interested in a household name, can buy this stock. from that perspective, i think -- i think split makes a lot of sense. >> you have been talking about the world pauses most powerful media company. why? becoming thet is
world's's most powerful media company. people do not appreciate netflix in a short time, for five years, now have 60 million global subscribers and we think over the next five years, has the potential to grow north of 150 million subscribers. it puts the company in a scale business, in a real strong position to continue to buy the best content to continue to grow. they've hit the velocity now where it is very difficult. alix: help me out here. what are the negatives? where are the worry spots? >> if you could find a pair on the name, it has been competition. the competitive playing field has changed a little bit in the last several months where we
have seen serious content players such as hbo introduce a direct to consumer over-the-top service itself. , hbo now.ase showtime, nickelodeon. we have seen a lot of premier to leavewners decide were introduce a service direct competitor to netflix. we will see to what extent consumers take up brands like hbo and what impact it has, if any, on netflix subscriber stories. gil: i would take a little bit of a nuanced view that we actually think possibly compare to three years ago, it is a safer investment. three years ago, it was still unknown whether or not the likes of amazon or google or apple had come into a space in a bigger way. three years later, netflix has achieved a scale and competitors
are still nipping at their heels and are still behind at this point. you can make the case is a safer investment than years ago. was 37% of peak traffic in north america. but one game of thrones came on, that fell to 33.5 percent to what you make of that? some content is still king. gil: i would argue their content has become king in a lot of ways . there has been a home run for them. orange is the new black season three comes out this friday. they released "daredevil" in partnership with the disney deal they announced a few years ago. the content of netflix has become very high quality. alix: it still has competition. gil: there will always be great competition the netflix will not have.
netflix at 37 or 33% of bandwidth, compared to amazon prime, even with fluctuation, netflix is in order magnitude larger. alix: thanks so much. and paul sweeney of bloomberg intelligence. good to see you. we are minutes away from the closing bell. coming up on the bloomberg market day, this week we learned -- to be by more than 4000 rental properties. is this shifting trend or a sign of economic weakness? we will discuss that coming up next. ♪ . .
[closing bell ringing] we are looking at the dow falling for a fourth straight day. we are negative on the dow jones industrial average for the year, falling by about five points. you can call it flat, but it was a crazy ride we have seen. flat, the nasdaq, one of the bigger losers there. but the dow is closing around a two-month low. we are in the middle available -- of the longest losing streak since march. the nasdaq falling for a second day. digging in the smp, telecom, tech and the utilities leading the smp lower -- the snp lower.